Mis-declaration of import consignment- Import of restricted item by declaring it other item, the plea of bail is not adhered to.

Case: Kishan Lal Chawala versus Union of India

Citation: 2011 (268) E.L.T. 480 (All.)

Issue:- Mis-declaration of import consignment- Import of restricted item by declaring it other item, the plea of bail is not adhered to.

Brief Facts:The firm of the applicant M/s Ruby Impex, Jalandhar had imported 8 containers of Scrap from M/s Durgesh International, USA, owned by Vicky Chawala, the son of the applicant containing Lead Scrap a restricted item by mis-declaring the same as Zinc Scrap 'Saves' and also huge quantities of used/empty cartridges casings and 3001 live cartridges for which there is absolute prohibition.

Appellant’s Contention: It is submitted that earlier the appellant was in the name of Vicky Chawala, the son of the applicant and the applicant was the authorized signatory of the said firm and on 12.04.2010 his son Vicky Chawla has transferred the firm in the name of applicant and since then he has become the proprietor of the firm M/s Ruby Impex. The applicant was not the importer of the goods during the relevant time.
It is also submitted that the applicant at best may be alleged only in respect of one consignment for which Bill of Entry has been filed and the alleged violation of Section 111 (m) and 111 (f) of the Act cannot be sustainable in the absence of any Bill of Entry filed in respect of remaining 7 containers. The applicant has filed only one Bill of Entry on 29.12.2009 in respect of one container. The said container was examined by the Customs Officers at ICD Loni and was allowed clearance after proper assessment of the goods. The goods in the import consignment were not loaded under the supervision of the importer or even by the exporter. The same was loaded directly from the stock yard and pre-inspection certificate in this regard has been issued by the DGFT (Govt. of India) approved authority. Hence, the wrong description of imported goods cannot be attributed to the applicant.
The wild allegations of organized syndicate for importing prohibited goods are beyond the evidences on record. The goods, at best liable to confiscation under Section 111 (d) of the Customs Act and for which the department could have passed adjudication order by imposing redemption fine and penalty for releasing the goods on payment of duty as had been done regularly in similar cases. In fact the customs authorities are well aware being confiscate of import of scrap in which many times cartridges, shells etc. are loaded by the exporters and in such cases no action has been initiated under the Arms Act. In this particular case for the best reasons known to them, the Department has also not taken any action against the applicant under the Arms Act.
It is also submitted that to attract the provisions for the punishment under Section 135 (1) (i) (A) of the Act, the goods should have market value exceeding rupees one crore. But the applicant at best can be implicated for one container which is not valued for more than 20 lacs. It is also submitted that it is a well settled law that there cannot be a seizure or confiscation of goods for which reasons for amendment of IGM has already been made and pending. The provisions of Section 46 of the Customs Act requires Bill of Entry to be filed by the importer and if he does not file any Bill of Entry, the Department is at liberty to take action under Section 48 of the Customs Act. But there is no power with the Customs Officers to force anybody to file Bill of Entry. If the Officers are of the bonafide plea that there has been a violation of the Arms Act, the matter should have been forwarded to the concerned police authorities to take appropriate action under the Arms Act. But the so-called live cartridges were never forwarded to the police for investigation. The goods were cleared by the proper Officer of Customs under the provisions of the Customs Act, 1962, under a proper B/E on payment of appropriate duty and therefore the seizure of the goods and arrest of the applicant is arbitrary, unreasonable and illegal.
It is further submitted that the exporter of the goods in USA by the letter dated 08.01.2010 had intimated that the containers detained by the DRI as mentioned-above were meant for other destination but not for present applicant. Hence, the exporter requested for return of the said containers. On receipt of this letter, the applicant through his Advocate requested the Customs authorities verbally to allow re-export and change in IGM. But the customs authorities declined to such request and even decline to take request through letter in this regard and ultimately on 09.03.2010 the Advocate sent the request by post. In the event of exporter's request for returning of the goods for which no payments were made by the applicant, so it was not justified on the part of the DRI to seize the remaining 7 containers. The permission of re-export of the goods has not been agreed by the Customs authorities and they themselves examined the containers.
It is further submitted that until Bill of entry is filed declaring the import of goods, there cannot be any allegation of mis-declaration and hence, the goods cannot be confiscated under Section 111 (d), & 111 (m) of the Customs Act, 1962.
Further the importer is required to file Bill of Entry under Section 46 of the Customs Act, 1962, but for that no time limit is prescribed and he cannot be forced upon to file B/E which the importer does not want to clear.
It is further submitted that the applicant has been falsely implicated in this case on the basis of fabricated and concocted story. The offences so alleged against the applicant do not attract the case under Section 135 (1) (A) & (C) and 104 of the Customs Act rather the nature of offence falls under Section 135 (i) (ii) of the Act for which imprisonment prescribed is upto three years term and the said offence is bailable offence.
The applicant has received pre-shipping Inspection Certificate issued by the Overseas authority in terms of Para 2.32 (i) of the Hand book of Procedure (Vol.I) in respect of the container for which Bill of Entry has been filed.
It is further submitted that the Panchnama dated 16.03.2010 when the Container No.HLXU 2208470 was first examined on 12.03.2010, revealed only one live cartridge. The said container was re-examined by the department on 12.07.2010 and carried on 13th, 14th, 15th, 16th and 17th July, 2010 in this regard, it is to be noted that only one Panchnama has been drawn on 17.07.2010 for which the proceedings took place on six consecutive days and in the said proceedings neither the applicant nor any of his representative was present.
It is further submitted that the Panchnama does not mention the presence of any expert authority like Forensic Expert or officers of CRCL, then who has certified the goods to be live cartridges it is abundantly clear that in any way DRI officers cannot said to be expert to identify the same as 'live cartridges'.
It is further submitted that the applicant cannot be held liable for the various reasons. Firstly, no Bill of Entry of 7 containers has been filed, so there is no mis-declaration. Secondly, the IGM and Bill of Ladings are the documents generated by the shipping line. Thirdly, the applicant vide his letter dated 09.03.2009 clarified to the customs authorities, while making request for re-export and the same was denied. Fourthly, a clear clarification by the exporter regarding direct loading of the containers from the shipyard absolves the applicant for mis-declaration in the goods. Fifthly, it is clarified in foregoing paras, that DRIs claim of recovery of live cartridges in the scraps is not tenable because no cartridges found to be live, irregularities in the proceedings and drawls of Panchnama etc. and contradictory stands taken by DRI as revealed from various documents. Sixthly, the recovery of lead scraps instead of brass scrap is not a grave offence. Import of lead scrap is allowed provided the importer is having a license for that.
It is further submitted that in compliance of the summons the applicant appeared before the summoning authority in the office of DRI and his statement was recorded under Section 108 of Customs Act, 1962, before the Senior Intelligence Officer and had to write the statement under duress and mal-treatment and was detained in the office overnight and has been shown arrest on the next day. The said statement under Section 108 of Customs Act was a dictated one tendered under duress.
The applicant is a proprietor of M/s Ruby Impex having valid IEC for import. The Bomb disposal Squad, Ghaziabad, has conducted the investigation and examination of containers from 12.07.2010 to 17.07.2010 (but drawn Panchnama only on 17.07.2010) and found that there was no explosive Bomb in the said container and has certified that no explosive material has been found in the Containers as averred in the affidavit. The applicant has cooperated in the investigation and as dutifully complied orders/directions of the DRI officers. The subject goods have already been placed under seizure and the relevant documents/records are also in the custody of DRI, therefore, there is no apprehension of the applicant influencing the investigation of the instant case in any manner.
The applicant is aged about 75 years and is suffering from various serious ailments as averred in the affidavit. The applicant has no previous criminal history and is suffering in jail since 15.09.2010.
Appellant relied upon the following cases:
-       Union of India Vs. Sampat Raj Dugar- reported in 1992 (58) E.L.T. 163 (S.C.).
-       Joginder Kumar Versus State of U.P. -reported in (1994) SCC 260.
-       Mirah Exports Pvt. Ltd. Vs. Collector of Customs- reported in 1998 (98) E.L.T. 3 (S.C.).
-       Union of India Vs. Pacific International Traders- reported in 2002 (143) E.L.T. A187 (S.C).
-       Pacific International Traders Vs. Union Of India- reported in 2002 (142) E.L.T. A187 (S.C).
-       Chandra I. Kriplani Versus Commissioner of Customs Acc, Mumbai- reported in 2002 (149) E.L.T. 537 (Tri-Mumbai).
-       Court on its own motion Vs. C.B.I. -reported in [ILR (2004) 1 Delhi 47].
-       Subhash Choudhary Vs. Deepak Jyala- reported in 2005 (179) E.L.T. 532 (Bom.).
-       Sitaram Aggarwal Vs. Customs -reported in 2005 (108) E.L.T. 478 (Del.).
-       Commissioner of Customs & Excise, Goa Versus Kabul Textiles (LLC)-reported in 2006 (206) E.L.T. 1173 (Bom).
-       Alpesh Arvind Lal Gandhi & Ors. Vs. Union of India & Ors. -reported in 2006 (75) RLT 5 (SC).
-       Commissioner Versus Kabul Textiles reported in (LLC)-2007 (218) E.L.T. A122 (S.C).
-       Sangit Krishna Kumar Agrawal Vs. Union of India- reported in 2007 (219) E.L.T. 143 (Bom.).
-       Commissioner of Customs, Calcutta Vs. South India Television (P) Ltd.- reported in 2007 (214) E.L.T. 3 (SC).
-       Avinash Bhosale Vs. Union of India arising out of SLP (Cri.) No. 4421 of 2007.
-       Commissioner V. Chandra I. Kriplani- reported in 2008 (227) E.L.T. A68 (S.C).
-       Sultan Kamruddin Dharani Vs. Union of India- reported in 2008 (231) E.L.T. 217 (Bom.).
-       Commissioner of Customs, Mumbai Vs. Foto Centre Trading Co. -reported in 2008 (225) E.L.T. 193 (Bom.).
-       Lal Kamlendra Pratap Singh Vs. State of U.P. and others -reported in (2009) 4 SCC 437.
-       Directorate of Revenue Intelligence Vs. Moni- reported in 2010 (252) E.L.T. 57 (Del.).
-       Arya International Vs. Commissioner of Customs, Kandla- reported in 2010 (258) E.L.T. 441 (Tri-Ahmd.).
-       Kulbhushan Goyal Vs. Joint Commissioner, Customs.
-       Commissioner of Customs, New Delhi Vs. Alok Overseas reported in 2004 (165) E.L.T. 252 (Tri.-Del).
-       S.G. Steels Vs. Commissioner of Customs, New Delhi reported in 2007 (215) E.L.T. 64 (Tri.-Del.)
-       Atlas Casting & Metal Impregration Vs. Commissioner of Customs, Hyderabad reported in 2005 (186) E.L.T. 575 (Tri.-Bang.)
-       Sukarm Ispat Co. Vs. Commissioner of Customs, Kandla reported in 2009 (241) E.L.T. 122 (Tri-Ahmd).
-       Vinayaka Alloys Pvt. Ltd. Vs. Commissioner of Customs (Imports), Chennai reported in 2009 (246) E.L.T. 540 (Tri-Chennai).
-       Samsara Shipping P. Ltd., Vs. Commissioner of Customs, New Delhi reported in 2008 (227) E.L.T. 206 (Tri-Del.).
-       Global Marine Agencies Vs. Commissioner of Customs, Jaipur reported in 2009 (243) E.L.T. 615 (Tri-Del).
-       Dee-Vee Metals Vs. Commissioner of Customs (Import), Mumbai reported in 2007 (216) E.L.T. 233 (Tri-Mumbai).
-       Commissioner of Customs, (ICD) New Delhi Vs. Valley Iron & Steel Co. Ltd. reported in 2006 (203) E.L.T. 55 (Tri-Del.).
-       Bhrigu Alloys & Steels Pvt. Ltd. Vs. Commissioner of Customs, New Delhi reported in 2006 (203) E.L.T. 57 (Tri-Del.).
-       Arya Alloys Pvt. Ltd. Vs. Commissioner of Customs ICD, New Delhi reported in 2009 (235) E.L.T. 542 (Tri-Del.).
-       Shree Extrusions Ltd. Vs. Commissioner of Customs, Kandla, reported in 2009 (238) E.L.T. 814 (Tri-Ahmd).
-       A.R. Casting Pvt. Ltd. Vs. Commissioner of Customs, New Delhi reported in 2006 (200) E.L.T. 411 (Tri-Del.).
-       Kabul Textiles Vs. Commissioner of Central Excise, Goa reported in 2004 (174) E.L.T. 470 (Tri-Mumbai).
-       Commissioner Vs. Subhash Chandra Rastogi reported in 2010 (257) E.L.T. 135 (Alld.).
-       Uttam Chand and Others Vs. Income Tax Officer, Central Circle, Amritsar reported in 1982 2 SCC 543.
-       Anil Mahajan Vs. Union of India reported in 2009 (235) E.L.T. 430 (Del.).
-       G.L. Didwania Vs. Union of India reported in 2009 (108) E.L.T. 16 (S.C.).
-       Seiko Brushware (India) Vs. Directorate of Revenue Intelligence reported in 2009 (248) E.L.T. 156 (Del.).
-       Medisphere Marketing Ltd. Vs. Inspector Customs Preventive reported in 2010 (256) E.L.T. 27 (Del.).
-       Ashok Manufacturing Co. Pvt. Ltd. Vs. C.K. Moorjani reported in 2003 (156) E.L.T. 184 (Del.).
-       Apex Recycling Pvt. Ltd. Vs. Commissioner of Central Excise, Delhi-I, reported in 2008 (230) E.L.T. 599 (Tri-Del.).
-       Kabul Textiles Vs. Commissioner of Central Excise, Goa reported in 2004 (174) E.L.T. 470 (Tri.-Mumbai).
-       Commissioner Vs. Subhash Chandra Rastogi reported in 2010 (257) E.L.T. A 135 (All.).
-       Assistant Collr. Of C. Ex. Rajamundry Vs. Duncan Agro Industries Ltd. reported in 2000 (120) E.L.T. 280 (S.C.).
-       Mohtesham Mohd. Ismail Vs. SPL. Director Enforcement Directorate reported in 2007 (220) E.L.T. 3 (S.C.)
-       Asst. Collector of Customs (Pre.), Bombay Vs. Ahmed Abdulkarim reported in 2009 (247) E.L.T. 97 (Bom.)
-       Vinod Solanki Vs. Union of India reported in 2009 (233) E.L.T. 157 (S.C.)
-       Raj Kumar Damani Vs. Union of India reported in 2010 (257) E.L.T. 371 (Cal.)
-       Gipoint Development Limited Vs. Collector of Customs, Madras reported in 1995 (80) E.L.T. 55 (Mad.)
-       Chaudhary International Vs. Collector of Customs, Bombay reported in 1999 (109) E.L.T. 371 (Tribunal)
-       J.B. Trading Corporation Vs. Union of India reported in 1990 (45) E.L.T. 9 (Mad.)
-       Ashwin S. Mehta Vs. Commissioner of Customs, Mumbai reported in 2006 (197) E.L.T. 386 (Tri.-Mumbai).

Respondent’s Contention: The Union of India has strongly opposed the prayer for bail and submitted that on the basis of Intelligence developed by the Officers of DRI, that the applicant, is engaged in illegal import of goods (Lead Scrap) a restricted item by mis-declaring the same as Zinc Scrap 'Saves' in the documents resulting in Consequential Under Valuation at ICD, Loni, Ghaziabad.
Appellant has mis-declared the goods imported by him from the exporter who is his own son Vicky Chawala, proprietor of the supplier firm M/s Durgesh International.
It is further submitted that the firm of the applicant i.e. M/s Ruby Impex, Jalandhar had imported eight containers of Scrap from the aforesaid M/s Durgesh International, USA containing Lead Scrap a restricted item for import in India. That the Bill of Entry No. 004686 dated 29.12.2009 pertaining to only one container Bearing No.UACU-3244414 was filed by the importer, applicant, at ICD, Loni alongwith the relevant invoice, the bill of lading etc. and the description of the goods was declared as Zinc Scrap as per ISRI 'Saves' in the special Bill of Entry and related documents. On examination the said container was found to contain lead scarp, mis-declared as Zinc Scrap 'Saves' in the import documents.
It is further submitted that despite repeated requests to persuade the applicant to file Bills of Entries of the remaining 7 containers and get the goods examined but neither the importer nor his authorized representative appeared for examination of the goods of the aforesaid remaining seven containers nor he filed any Bill of Entry in respect of the aforesaid containers.
That on examination of remaining containers the Lead Scrap was found in the form of lead cables, sheets, weights etc. and the Zinc Scrap was present in a very small quantity meant only to conceal the Lead Scrap during first hand examination of the container.
It is further submitted that on examination of one of the said Containers declared to contain Brass Scrap, huge quantities of used casings of cartridges and live cartridges of different bore and make were found kept concealed beneath the Brass Scrap layer.
It is also submitted that the accused-applicant is fully aware of the fact that the contents of the containers imported by him were not Zinc Scrap but Lead Scrap which is restricted item and live cartridges/empty cartridges casings which are prohibited items for import and this fact has been admitted by the accused-applicant in his statement recorded under Section 108 of the Customs Act, 1962.
It is further submitted that in as much as in all the documents whether the Bill of Entry submitted by him or Bill of lading and the goods declared in IGM (Import General Manifest) by the exporter, the goods were shown as "Zinc Scrap" and 'Brass Scrap' while in fact the goods illegally imported found in the containers were Lead Scrap and 3001 Live cartridges and 15,198.07 Kgs. empty shells of cartridges as detailed in paragraph 16 of the complaint for which there is absolute prohibition vide Notification No.40-Cus dated 6.6.1970 issued under Section 11 of the Customs Act, 1962.
The applicant imported the Lead Scrap a restricted item and the same can only be imported after fulfilling certain conditions under Rule 13 of the Hazardous Wastes (Management, Handling and Trans-boundary Movement) Rule, 2008 the import and export of Hazardous Wastes for disposal from any country into India are prohibited.
However, the import and export of Hazardous Wastes specified in Schedule III for recycling, recovery and reuse is regulated in accordance with the conditions laid down in the said Schedule. Hence, the pre-condition for importing the Lead Scrap as per Rule 14 (2): Shall require prior informed consent of the country from where it is imported or exported to ii) Shall require the license from the Directorate General of Foreign Trade and iii) Prior written permission of the Central Government. Undisputedly none of the above conditions were fulfilled by the appellant.
It was submitted that the applicant in his statement recorded under Section 108 of the Customs Act in reply to Question No.17 he has stated that earlier the firm M/s Ruby Impex was in the name of Vicky Chawala and he was the authorized signatory and from the last year his son has transferred the firm in his name.
It is further submitted that the proceedings under Section 108 of the Customs Act are judicial proceedings within the meaning of Section 193 and 228 I.P.C. and the statement recorded under Section 108 of the Customs Act are admissible in evidence.
Respondent has relied upon the following cases:
-       K.I. Pavunny Vs. Asstt. Collector (HQ) Central Excise, Cochin reported in (1997) 3 SCC page 721.
-       Surjeet Singh Chhabra Vs. Union of India reported in (1997) 1 SCC page 508.
-       Naresh J. Sukhwani Vs. Union of India reported in (1995) Suppl. (4) SCC page 663.

Reasoning of the Judgment:The imported material is prohibited as per the Trade Policy of the Government of India, Handbook of Procedures Vol. 1 of Foreign Trade Policy 2009-2014
Considering the facts and circumstances of the case, perusing the record and considering the nature of serious allegations leveled against the applicant which attracts the provisions of offences punishable under Section 132 and Section 135 (1) (i) (A) & (C) of the Customs Act, 1962, without expressing any opinion on the merit of the case, the High Court do not find it a fit case for bail, therefore, the prayer for bail is hereby rejected.
However, since the accused-applicant is said to be a senior citizen aged about 75 years, therefore, the learned trial court is directed to conclude the trail expeditiously in accordance with law.

Decision: The appeal is dismissed.

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